Reliance Industries in conjunction with JM Financial ARC is set to take over insolvency-bound Alok Industries after majority of lenders of textiles firm have approved RIL-JM Financial's resolution plan. The resolution plan was put to vote before the committee of creditors of the textiles company on June 20, 2018. "Pursuant to the voting, the Resolution Plan has received the assent of 72.192 per cent of the voting share of the CoC," RIL said in a regulatory filing.
The committee of creditors of Alok Industries had earlier rejected Reliance's resolution plan for acquiring the firm in partnership with JM Financial Asset Reconstruction Company. RIL-JM Financial ARC was the sole bidder and its initial offer of Rs 4,950 crore in April was rejected on the grounds that it was too low.
According to a report in The Economic Times, RIL-JM Financial improved its bid by Rs 100 crore in second round and offered to pay Rs 5,050 crore -- an amount which is 83 per cent less than the total dues of Rs 29,500 crore.
Under the IBC, a resolution plan needs approval from at least 66 per cent of the lenders to be eligible for the next stage, which is the NCLT's approval. In a regulatory filing to the exchanges, RIL said: "We have been informed that our plan did not meet with the approval of the Committee of Creditors of Alok Industries as required under the Insolvency and Bankruptcy Code."
Last year in July, the Ahmedabad bench of the National Company Law Tribunal had admitted insolvency proceedings against Alok Industries under the Insolvency and Bankruptcy Code. Alok Industries was among the 12 companies on RBI's first list. A consortium of lenders led by SBI is claiming dues of over Rs 23,000 crore from the beleaguered textile company.
Earlier in May 25, Alok Industries had informed that the resolution professional of the company has filed an application before the NCLT for liquidation of the company and no order has been passed by it. It had sought exemption in filing of quarterly and annual results as it was facing liquidation.